New Zealand prepares for ‘wellbeing budget’

17 May 19

New Zealand will place child poverty, domestic violence, and addressing mental health problems at the heart of its pioneering “wellbeing budget”.

The country has declared that it will be the first country in the world to measure the success of public financial management by its people’s wellbeing.

Finance minister Grant Robertson said this week that ministries will report against a wide set of indicators based on this principle as a result of the budget that he will deliver on 30 May.

In a pre-budget speech to business leaders on Tuesday, Robertson played down the ‘rockstar’ label sometimes placed on New Zealand’s successful economy.

The International Monetary Fund expects New Zealand to grow at about 2.5 % in 2019 and 2.9% in 2020, but Robertson said that despite this many citizens were not benefitting.

“Sure we had – and have – GDP growth rates that many other countries around the world envied, but for many New Zealanders, this GDP growth had not translated into higher living standards or better opportunities,” he said.

“How could we be a rockstar, they asked, with homelessness, child poverty and inequality on the rise?”

The government has indicated that Budget 2019: The Wellbeing Budget’ will broaden the traditional focus beyond economic and fiscal policy. 

It will use the Treasury’s Living Standards Framework to inform government investment priorities and funding decisions.

This is calculated on the principle that well-established economic and financial measures can sometimes miss important aspects of wellbeing.

In turn, the government will measure and report against a broader set of indicators to show a “more rounded” measure of success as a country that go beyond traditional economic indicators in order to determine how the economy interacts with people’s lives. 

The recently passed Child Poverty Reduction Act, for example, obliges the finance ministry to report at each budget how the country is performing against a set of child wellbeing and poverty measures.

The government has indicated that the wellbeing budget will have five main priorities: transitioning to a low-emissions economy; digital innovation; reducing child poverty; mental health, and lifting incomes for Māori and Pacific people. 

  • Gavin O'Toole, expert on Latin America
    Gavin O'Toole

    A freelance journalist. He has written six books about Latin America and taught the politics of the region at Queen Mary, University of London.

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